Billionaire Israel Englander Is Doubling Down on These 2 Outstanding Dividend Stocks. Should You?

Millennium Management more than doubled its positions in AbbVie and Costco during Q2, highlighting two resilient dividend-paying businesses. AbbVie posted Q2 revenue growth of 10.2% to roughly $17 billion, supported by Skyrizi and Rinvoq, and acquired Apogee Therapeutics for $10.9 billion to add phase 3 atopic-dermatitis asset zumilokibart. Costco delivered fiscal Q3 revenue growth of 11.6% to $70.5 billion, 9.8% comparable-sales growth, and 15% EPS growth to $4.93, though its shares are down 4% over the past year and trade at 40.8x forward earnings.

Analysis

ABBV’s near-term rerating rests less on dividend support than on whether its immunology franchise can sustain volume-led growth without materially higher rebates as biosimilar and next-generation competition intensifies. The strategic risk is that management deploys post-Humira cash flow into expensive pipeline assets to preserve growth, raising integration and capital-allocation risk; any deal-related earnings dilution would matter more than the headline purchase price. APGE should be viewed as an event-risk vehicle rather than a clean AbbVie read-through until transaction terms, regulatory status, and clinical data are independently verified.

COST remains a high-quality defensive compounder, but its valuation leaves little tolerance for a deceleration in traffic, renewal rates, or discretionary general-merchandise mix. The key second-order exposure is wage and freight inflation: Costco’s price-investment strategy protects member loyalty but can defer gross-margin recovery, while Walmart (WMT) and Amazon (AMZN) can use broader digital ecosystems to compete on convenience. Over the next 1-3 months, monthly comparable-sales disclosures and membership-fee commentary are more likely to drive the stock than broad consumer-spending data; over 6-18 months, digital mix and international unit economics determine whether the premium multiple can persist.

The contrarian view is that ABBV is the more actionable risk-adjusted long despite being framed as an income holding: successful execution in immunology can support earnings durability and incremental multiple expansion, whereas COST needs near-flawless operating prints simply to defend its existing multiple. Millennium’s reported position changes are not a catalyst—13F data are delayed, omit hedges and derivatives, and should not be interpreted as conviction in either standalone equity.

Key Decisions for Investors

• Initiate a 6-12 month long ABBV / short XLV pair on pullbacks: isolate company-specific immunology execution while reducing broad pharma and rate sensitivity. Target 10-15% relative upside; exit if management cuts medium-term immunology guidance, reports sustained net-price erosion, or announces a materially dilutive acquisition.
• Do not chase COST at the current premium multiple. Set a watch trigger around the next two monthly sales releases: consider a tactical long only after evidence that traffic and renewal trends remain intact while gross margin stabilizes; otherwise, a 3-6 month COST / long WMT relative-value trade is preferable if Costco’s comp trend trails Walmart’s U.S. comparable-sales momentum.
• For existing COST longs, buy 3-6 month downside put spreads around earnings rather than reduce core exposure outright. The asymmetric risk is a modest comp or renewal miss producing disproportionate multiple compression; reassess hedges if forward P/E falls toward the consumer-staples premium range or management demonstrates durable margin expansion.
• Treat APGE as an alert, not a recommendation: verify whether a definitive transaction exists, the consideration structure, and any antitrust or clinical contingencies before establishing exposure. If a cash acquisition is confirmed, evaluate merger-arbitrage only after the deal spread compensates for closing risk and the probability-weighted standalone downside.